Warner Bros. has prevailed at the Ninth Circuit Court of Appeals in a challenge made by one of its legal adversaries, Marc Toberoff, who represents the estates of Superman co-creators Jerry Siegel and Joe Shuster, over the use of stolen documents.

In the midst of working on the case to terminate the studio's rights to Superman, many of Toberoff's documents were allegedly taken by one of his former associates, David Michaels, who, reportedly frustrated by his own unsuccessful attempt to solicit business from the Superman heirs, sent the sensitive documents to Warners' offices.

The documents pertained to the months where Toberoff had approached the heirs and worked a joint venture to exploit Superman rights. At the time, he was working with Hollywood superagent Ari Emanuel. The documents include letters between the family members, including one from one of Siegel's sons, warning his sister from getting involved with Toberoff and Emanuel and their purported secret agenda to control Superman for themselves. Warner contended that Toberoff had caused the heirs to repudiate a settlement agreement. Toberoff has contended that no agreement was ever formalized.

In 2010, after a termination notice on Superman was deemed valid, Warners later brought a tortious interference lawsuit against Toberoff for interfering with its Superman rights and attempted to use the documents. But Toberoff objected, citing that the documents were confidential, the result of attorney-client privilege. Last year, a federal judge ruled that Toberoff had pierced the privilege when he disclosed the nature of those documents to law enforcement authorities who were investigating the theft of his documents. Toberoff appealed.

In a decision handed down today, Ninth Circuit judge Diarmuid O’Scannlain provided a victory for Warner Bros. and agrees with a lower court that ruled the documents were fair play.

In setting up the dispute and running down the facts, the judge notes how Toberoff served as both a business adviser and an attorney for that venture and seems uncomfortable with that arrangement. But that isn't the main issue here. "The ethical and professional concerns raised by Toberoff’s actions will likely occur to many readers, but they are not before this court," writes the judge.

The bigger issue is the validity of Toberoff's contention that he made only a "selective waiver" of the privilege, for use in a potential criminal action but not a civil one, and that by allowing the studio to use the documents, it would undermine the amount of confidentiality that attorneys have with their clients.

The Ninth Circuit notes the sanctity of attorney-client privilege as to “encourage full and frank communication between attorneys and their clients and thereby promote broader public interests in the observance of law and administration of justice," but it also recognizes the ways that privilege can be waived, by example, voluntarily disclosing information to third parties.

Judge O'Scanniain is reluctant to accept the theory of "selective waiver."

"It may well be that encouraging cooperation with the government is an alternative route to the ultimate goal of promoting adherence to the law," he writes. "And there are those who assert that 'an exception to the third-party waiver rule need [not] be moored to the justifications of the attorney-client privilege.' We disagree. If we were to unmoor a privilege from its underlying justification, we would at least be failing to construe the privilege narrowly. And more likely, we would be creating an entirely new privilege."

The judge notes that the Supreme Court has given discretion to adopt this "selective waiver," but notes that Congress has declined to adopt it.

The Ninth Circuit also addresses Toberoff's contention that his discussions were subject to a confidentiality agreement, based upon a representation made in a letter sent by the U.S. Attorney's Office investigating the theft (where no responsibility for the wrongdoing was ever determined).

Again, the arguments fail.

"Assuming that this letter constitutes a confidentiality agreement," says the opinion, "Petitioners have provided no convincing reason that post hoc contracts regarding how information may be revealed encourage frank conversation at the time of the advice."

Finally, Toberoff fails to convince the appellate circuit that he should be treated differently because he was the victim of an alleged criminal act. The opinion continues:

"We are unconvinced by Petitioners’ argument that adopting such a rule will drastically impair law enforcement attempts to investigate espionage against 'attorneys, financial institutions, medical providers, national security agencies, judges, large corporations, or law firms.' This has not occurred despite near universal rejection of a selective waiver rule."

Warner now gets confirmation that it can use the documents. And perhaps just as importantly as new weapons in making the case that Toberoff has tortiously interfered with an alleged agreement between the Superman heirs and the studio, comes skepticism from the appellate court about Toberoff's activities. For example, deep into the opinion, the Ninth Circuit notes casually that "Furthermore, most of these documents are not covered by attorney-client privilege because they do not represent communications between a lawyer and his client for the purpose of obtaining legal advice."

Warners has contended in its lawsuit that Toberoff deserves to be treated like a businessman rather than a lawyer, and if the ongoing case ever comes back to the Ninth Circuit, it could find judges disposed to its viewpoint on many of the contentious matters.

"We are extremely pleased that the 9th Circuit unanimously found in our favor. The ruling means that defendant Mark Toberoff must now turn over critical evidence in the pending litigation against him and others."

In a statement, Toberoff says:

"We cooperated with the US Attorney's office to enable them to investigate the theft from our law firm of the Siegels and Shuster's privileged documents. We are disappointed in today's decision which holds that such cooperation with law enforcement by the victims of a privacy crime, itself waives privilege as to stolen documents. However, nothing in this ruling or the documents at issue will affect the merits of this case. We are considering our options as to the ruling, and will continue to vigorously defend our clients' rights."